Dollar Slammed, USDJPY Roiled On Trump Campaign Subpoena Report

it has been a rocky session for the dollar which has dumped to a 4-week low, dragging with it USDJPY, the Nikkei and Treasury yields - and to a lesser extend US equity futures - all of which have slumped in the Japanese am session, following a WSJ report that Robert Mueller’s team "caught the Trump campaign by surprise" in mid-October by issuing a document subpoena to more than a dozen top officials.

The campaign had previously been voluntarily complying with the special counsel’s requests for information, and had been sharing with Mr. Mueller’s team the documents it provided to congressional committees as part of their probes of Russian interference into the 2016 presidential election. The Trump campaign is providing documents in response to the subpoena on an “ongoing” basis, the person said.

If confirmed, this would be the first time Trump’s campaign has been ordered to turn over information to Mueller’s investigation, even if subpoena has not - for now - compelled any officials to testify before  Mueller’s grand jury.

According to Citi, and a handful of other desks,the news of the report is what initially sent the USDJPY below 113, at which point stop loss selling accelerated and has seen the pair tumble to 112.50 at last check. 

While it took the other major currencies a while to catch on, the dollar eventually did selloff across the board, with cable and EUR leading the AUD and kiwi.  Meanwhile, the Korean won has surged, sending the USDKRW below 1,100, ignoring the latest jawboning and verbal intervention from Korean central bankers.

Still, not everyone is convinced and Citi for one, thinks the sell-off in US assets has been exaggerated due to diminished liquidity conditions and stop runs, especially since the news that Mueller issued a subpoena "doesn't really have any implications for markets."

Others, such as Westpac's FX strategist Sean Callow, agree: “USD/JPY’s apparent fatigue is consistent with a speculative market already very short yen”he said, adding that “USD/JPY seems to have already factored in not only a Fed hike in December but some form of tax cut package as well.”

Furthermore, while the subpoena news may seem surprising, Citi's Ding notes that "we already know that the investigation is ongoing and links between Russia and the Trump campaign are under scrutiny", in other words the WSJ report was to be expected, even if the market appears to be overplaying it for the time being.

In any case, at least for now the mood is one of risk off, and in addition to the dollar, Nikkei, yields and US futures all heavy, Chinese stocks are also down with the Shanghai Comp -0.7% lower, although that may be more a function of the sharp reversal in PBOC liquidity injections, because after yesterday's gargantuan 310Bn net reverse repo - and 810Bn net this week - today's 10Bn liquidity drain once again prompted fears that the PBOC just may be serious about the deleveraging after all.


Colonel Shitze… ebworthen Thu, 11/16/2017 - 22:54 Permalink

Defense atty tactics never been so effective, except usually “but the witness is crooked” is in addition to admitting their client is guilty. With the Hillary hard-on crowd, it’s “the witness is crooked therefore my clients innocent.” Except she’s not the witness & matter of time before before y’all realize they’re in the same ass crooked ass canoe. I’ll be surprised if anybody can claim “witch hunt” w a straight face much longer.

In reply to by ebworthen

Endgame Napoleon Colonel Shitze… Fri, 11/17/2017 - 07:39 Permalink

Subpoenas for what: opening and politely responding to an email from a foreigner that has to be the typical thing in a big election in this stupid, globalist era; a 20-minute meeting with a foreigner offering op-research dirt, when the other campaign also met with foreigners, offering dirt from the same country; a relatively small amount of ads on a website, bought by these foreigners of their own volition, that did not influence one vote in an election that was not about the subject of Russia, no matter how hard a partisan media tried to drum up concern about Russia to avoid the economic issues that motivated Deplorable voters.

How can they have any credibility, when they ignored that a sale of 20% of the nation’s stock of a bomb-making material was brokered by an ex president whose wife had to okay it from the State Department, not to mention the $500k personal gratuity that he received for a 1-hour speech to bankers in Russia? And they knew the deal was shady, not in a minor way, in a major way. Because, they investigated the company that transported the uranium and the state-affiliated agency that bought it for racketeering and money laundering. You guys keep blaming Sessions, like it would be his place in a [supposedly] non Banana Republic to investigate his employer’s political opponents, but it is not his place.

In reply to by Colonel Shitze…

Albertarocks Thu, 11/16/2017 - 23:11 Permalink

"It has been a rocky session for the dollar which has dumped to a 4-week low, dragging with it USDJPY, the Nikkei and Treasury yields - and to a lesser extend US equity futures - all of which have slumped in the Japanese am session, following a WSJ report that Robert Mueller’s team "caught the Trump campaign by surprise" in mid-October by issuing a document subpoena to more than a dozen top officials."The dollar has been dropping.  The WSJ reports that Mueller's team issued a document subpoena.   This is laughable.  They are two completely unrelated stories.  Believe me, the dollar is falling for reasons far, far more important than some totally unrelated action by Mueller.It's like... "Gold gets hammered following reports that Starbucks coffee might be too hot for some consumers."

markettime Thu, 11/16/2017 - 23:01 Permalink

Seems to me the whole dollar vs gold and dollar vs oil is not as tightly inverse correlated as it used to be. Signs of a broken dead system maybe? Or just lazy manipulators?

peterk Thu, 11/16/2017 - 23:05 Permalink

zerohedge is really  getting is a 60 pip swing  ROILED?...  no mention when usdjpy went UP  70 pips  2 days ago... fellas stick to politics and  ramping GOLD at every  bump in the road...  Markets are not your thinggold is going to SUB $1000 easy anyway

Cockoo lester1 Fri, 11/17/2017 - 02:12 Permalink

Rothschild owned economist claims Saudis 2030 vision adios petro-dollars via communist RT report. Commodities will take major hit once this happens. Hillary crimes are five miles wides and twenty miles deep the D.O.J. is sleep on the job. Mueller is the problem if he does not indict the Clinton camp and whereever that leads to. Quote “Believe next phase of global economic reset will begin in part with the breaking of petrodollar dominance. Strategic shift away from the petrodollar has been the symbiosis between both the US/Saudi Arabia. S. A. has been single most important key to the dollar remaining as the petrocurrency from the very beginning,” Smith wrote in an article for his website 

In reply to by lester1

Endgame Napoleon Cockoo Fri, 11/17/2017 - 08:01 Permalink

The Saudis own all those US bonds and have for decades. Who knew when the MSM (Many Sold-Out Muckrakers) told us every lurid detail about sex scandals, rather than about economically crucial things like that, just like they ignore all of these structural, economic problems to focus on SMUTraking. So, I can see your point on the shaky financing, but aren’t there other major oil producers? In an emergency, can’t we use the strategic oil reserves, following the “drill-baby-drill” policy suggestion? Maybe, one reason why the rich hesitate to invest in their own country is that, if the Saudis cash in those bonds, Uncle Sam may go after money held offshore by multinationals and other Americans who have invested in the low-cost labor abroad to make bank, leaving their underemployed country vulnerable to such financial manipulation. Humans are all greedy and flawed, including the poor ones soaking up all the welfare and child-tax-credit welfare. And voters know it. Leaders should just be honest with the public, figuring out a solution to the problem, instead of distracting with sex scandals and Game of Thrones cutthroatery.

In reply to by Cockoo

Cockoo Endgame Napoleon Sat, 11/18/2017 - 03:39 Permalink

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Agree 100%. Instead of sensational storyline bytes or the latest trends, fixing the economy should become major priority along with maintaining roads, bridges, etc. Returning capital from offshore would be a major plus. Market speculation seems fixed just like everything else war, education, MSM-mainstream media under the guise of investing

In reply to by Endgame Napoleon